IN FOCUS: GEVO, INC. AND FLY GREEN DAY AT CHICAGO O’HARE

The alphaDIRECT Insight

During Fly Green Day at Chicago O’Hare airport, Gevo’s renewable jet fuel was used with the same fueling infrastructure as the petro-based jet fuel for the first time by eight different commercial airlines. We believe this indicates that the airline industry is strongly committed to renewable jet fuels, as they start taking the necessary steps toward a commercial scale level. This event also proves that alternative fuels can be delivered through the regular supply chain without the need of a specialty system that would increase the all-in delivered cost to airlines. By eliminating this initial supply chain barrier, the airline industry has taken another important step toward full commercialization.

Shawn Severson: Pat, can you help investors better understand what actually happens in terms of the logistics model when it comes to supplying fuel to a commercial airline?

Pat Gruber: The route normally taken for a petro-based jet fuel is A) Fuel is piped from the production facility to a tank farm off site B) The fuel is pooled, frequently from multiple suppliers and certified C) The fuel is piped to onsite airport tanks D) The fuel is piped to a hydrant system and from there to refueling trucks E) The trucks deliver the fuel to the plane.

Fly Green Day at Chicago O’Hare on November 8, 2017, was the first time Gevo ATJ, which is a renewable fuel, was used with the same infrastructure as a petro-fuel. The number of players who supported this was significant and ranged from fuel producers, to tank farm operators, to pipeline companies and airlines. We believe that this is a very a good sign that the airline industry is serious about making renewable jet fuel a reality on a commercial scale.

Shawn Severson: In terms of the cost per gallon to an airline, approximately how much of that total can be attributed to the logistics and transportation of actually getting the fuel to an airline?

Pat Gruber: The cost of getting the fuel to the plane is only a fraction of the total cost as long as the same petro-based infrastructure is used for the alternative jet fuels. Historically, renewable and alternative jet fuels have typically been brought to the airplanes via a specialty system, which can add significant costs to the airline. For example, if the conventional infrastructure could not be used, the fuel needs to be trucked from the producer, specialty-blended and segregated and then out into a truck and delivered. As you can imagine, this can be disruptive to the supply chain.

Shawn Severson: Can you explain what a drop-in fuel is, such as the renewable isobutanol that GEVO produces vs. other renewable fuels?

Pat Gruber: Sure, Shawn. A “drop in fuel” meets all the requirements of the ASTM Specifications. ATJ from IBA meets those specs. That means that it has all of the same properties as a petroleum- based fuel and does not require any special treatment or handling of the fuel.